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The Tax PublishersITA Nos. 1989, 2026/Ahd/2017
2019 TaxPub(DT) 5382 (Ahd-Trib)INCOME TAX ACT, 1961
Section 14A
Where own funds of assessee in the form of share capital and reserves and surplus was Rs. 116.50 Crores as against the total investments made by the assessee in the sum of Rs. 16.42 Crores, therefore, assessee was having sufficient own funds in his kitty to make investment thereof and disallowance of interest made under second limb of rule 8D(2) was liable to be deleted.
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Disallowance under section 14A - Expenditure against exempt income - Assessee having sufficient own funds -
Assessee had claimed exempt income in the form of dividend in respect of investments made in equity shares. AO observed that assessee company had made suo moto disallowance under section 14A read with third limb of rule 8D of the Rules. AO made further disallowance in respect of rule 8D and by applying second limb towards disallowance of interest. CIT(A) appreciated the contentions of assessee that it was having sufficient own funds in its kitty and hence, it could be presumed that investments were made out of own funds thereof. Held: Own funds of assessee in the form of share capital and reserves and surplus at Rs. 116.50 Crores as against the total investments made by assessee in the sum of Rs. 16.42 Crores. This goes to prove that assessee was having sufficient own funds in his kitty to make investment thereof. CIT(A) by placing records on CIT v. HDFC Bank Ltd. [(2016) 67 Taxman.com 41 (Kol) : 2016 TaxPub(DT) 1325 (Kol-Trib)] had deleted the disallowance of interest made under second limb of rule 8D (2) of the rules.
Followed:CIT v. HDFC Bank Ltd. (2014) 366 ITR 505 (Bom.) : 2014 TaxPub(DT) 3351 (Bom-HC) CIT v. UTI Bank Ltd. (2013) 32 taxmann.com 370 (Guj)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
INCOME TAX ACT, 1961
Section 14A
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